NEWSWATCH 2008-09-15 (2)

SOBEYS SALES LIFT EMPIRE RESULTS

STELLARTON, Nova Scotia — Improved sales and profits from Sobeys stores offset lower earnings from the real estate division at Empire Cos., the company said in a review of first-quarter financial results last week. Sobeys, boosted in part by the addition of Thrifty Foods to its store base, accounted for nearly all of Empire's $3.5 billion in sales for the first quarter, which ended Aug. 2. Sales were up by 7.4% and same-store sales improved by 3%. Net earnings of $70 million were flat compared with the same period last year, due mainly to a decline in operating income from the real estate division after a sale of 61 properties. Operating income from the Sobeys division improved by 10.8% during the quarter.

WAL-MART EYES CALIF. MARKETSIDES

BENTONVILLE, Ark. — As Wal-Mart Stores prepares to open its first Marketside locations in the Phoenix area, the company is reportedly scouting locations in Southern California as well, the Financial Times of London reported last week. The publication said Wal-Mart has applied for a liquor license for a Marketside unit in Oceanside, a coastal city north of San Diego — a couple of miles from a Tesco Fresh & Easy that opened in Vista, Calif., earlier this year. Marketside stores will be 15,000-20,000 square feet and will offer an assortment of fresh foods and prepared meals.

SUPERVALU NAMES NEW AD AGENCY

MINNEAPOLIS — Supervalu here has consolidated creative advertising for its various banners under a new brand platform to be executed by a consortium of freelance talent and the Fame Retail Agency, a spokeswoman told SN last week. Fame is a division of Omnicom's TBWA and also works for Target. Supervalu previously had agreements with several other ad agencies, including Dailey & Associates, Los Angeles, which handled creative advertising for Albertsons.

DOLLAR GENERAL SEES PROFIT GAINS

GOODLETTSVILLE, Tenn. — Progress on a slate of initiatives to ramp up basket size and customer visits helped Dollar General post a profit and an 11.2% sales increase during the second quarter, the retailer here said. Dollar General posted net income of $27.7 million on sales of $2.61 billion during the quarter, which ended Aug. 1. Dollar General and its predecessor company posted a combined $68.8 million loss in the same period last year, stemming in part from expenses related to its acquisition by a private-equity group. In a conference call discussing the results, Richard Dreiling, chief executive officer, said new planograms and product adjacencies, as well as a more consistent offering throughout the chain, helped boost results. Dreiling said he had a “cautious” outlook for the rest of the year.

FRESH & EASY EXPANDS PRIVATE LABEL

EL SEGUNDO, Calif. — Fresh & Easy Neighborhood Market last week said it plans to introduce more than 200 additional private-label products by the end of the year. Own-brand products account for slightly more than half of the 3,500 SKUs and more than 70% of sales at the 78 Fresh & Easy stores Tesco has opened in California, Arizona and Nevada since last November. The company said that more than 80% of its customers cite the private-label lines as one of the main reasons they shop at the stores. The new lines will replace some existing own-label items, as well as other seasonal products, a company spokesman told SN.